Download Is Deflation of Healthcare Costs a Good Thing?

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Is Deflation of
Healthcare Costs a Good
Thing?
A discussion of current
trends in #Canhealth
@willfalk
April 2015
FOR DISCUSSION PURPOSES ONLY
Diagnosing the Illness – The Changing Nature of
the Canadian Patient
Over the past 40 years, the change in health status across the population has put a strain
on a healthcare system that was built primarily to deal with acute illnesses
9yrs
Increase in life
expectancy
PwC
3x
Less likely to
smoke
1.4x
3x
2.6x
Less likely to
die from CVD
1.1x
More likely to
have cancer
More likely to
be obese
FOR DISCUSSION PURPOSES ONLY
Less likely to die
from cancer
2
The Perception - ‘Out of Control’ Spending
Five years ago, there was significant alarm about the recent rise in healthcare spending (in
both absolute terms, and as a percentage of GDP)…
Total Health Expenditure as a % of GDP, Canada
Source: National Health Expenditure Database, 1975-2009, CIHI
PwC
FOR DISCUSSION PURPOSES ONLY
3
The Response – Applying the Brakes
…but government responded, slowing the rate of growth dramatically across all sectors of
the healthcare system
9.0
Ontario Healthcare Spending by Sector –
Growth rate from prior year, 2009 vs. 2014 (forecast)
8.0
7.0
6.0
5.0
%
2009
4.0
2014f
3.0
2.0
1.0
0.0
Hospitals
Physicians
Drugs
Other
Source: National Health Expenditure Database, 1975-2014, CIHI
f: Forecast
Drugs category does not include those dispensed at Hospitals or other institutions
PwC
FOR DISCUSSION PURPOSES ONLY
4
The Result – Reduction in Spending
When measured as a % of GDP, health expenditure is down considerably in Canada since
2009 (1.4% in Ontario)
Total Health Expenditure as a % of GDP, Canada
Source: National Health Expenditure Database, 1975-2014, CIHI
PwC
FOR DISCUSSION PURPOSES ONLY
5
Variances Across Canada
But this hasn’t been consistently applied across Canada – there’s potentially more pain to
come
Canadian and Provincial Healthcare Spending by Sector –
Growth rate from prior year, 2009 vs. 2014 (forecast)
10.0%
8.0%
6.0%
4.0%
Canada 2009
2.0%
Ontario 2014f
Alberta 2014f
0.0%
Hospitals
Physicians
Drugs
Other
Rest of Canada 2014f
-2.0%
-4.0%
-6.0%
Source: National Health Expenditure Database, 1975-2014, CIHI
f: Forecast
Drugs category does not include those dispensed at Hospitals or other institutions
PwC
FOR DISCUSSION PURPOSES ONLY
6
Health Care in Canada: Five Innovation Trends
A
Focus on “Frequent Flyers” as a Solution to Integration and
Appropriateness
Clinician Supply: The Rise of Retail Pharmacy, Large
B Primary Care Groups , and Specialty Unemployment.
C
Financing Reform: Moving Away from Global Budgets and
towards Bundled Payments
D
Digitization Continues and Morphs into mHealth and
Quantified Self
E
“Health Everywhere”: The Rise of New Health Entrants
PwC
FOR DISCUSSION PURPOSES ONLY
7
A
Integrated Care for Complex Patients
The notion of 1% and 5% “frequent flyers” is now central in policy discussions
Figure 1. Health Care Cost Concentration:
Distribution of health expenditure for the Ontario population,
by magnitude of expenditure, 2007
Ontario Population
0%
10%
Health Expenditure
1%
5%
10%
20%
Expenditure
Threshold
(2007 Dollars)
34%
30%
$33,335
40%
50%
50%
66%
60%
79%
$6,216
70%
$3,041
80%
99%
90%
$181
100%
PwC
Source: ICES
FOR DISCUSSION PURPOSES ONLY
8
(Modern and Appropriate
DIGITISATION
Evidence-Based Delisting)
How can physicians and patients have the important conversations necessary to ensure the
right care is delivered at the right time? Choosing Wisely® aims to answer that question.
An initiative of the ABIM Foundation, Choosing Wisely is focused on encouraging
physicians, patients and other health care stakeholders to think and talk about medical tests
and procedures that may be unnecessary, and in some instances can cause harm.
To spark these conversations, leading specialty societies have created lists of “Things
Physicians and Patients Should Question” — evidence-based recommendations that should
be discussed to help make wise decisions about the most appropriate care based on a
patients’ individual situation.
Consumer Reports is developing and disseminating materials for patients through large
consumer groups to help patients engage their physicians in these conversations and ask
questions about what tests and procedures are right for them.
More than 35 specialty societies have now joined the campaign, and 17 unveiled new lists on
February 21, 2013
PwC
FOR DISCUSSION PURPOSES ONLY
Slide 9
B
Rise of the Big Primary Care Groups
Pressures on GPs, alongside system reforms, have led to the rise of Primary Care groups
Appletree Medical Group –
220 Primary Care Providers
Oshawa Clinic – 127 Primary
Care Providers
Jack Nathan Health – 52
Canadian Clinics
Primacy Clinic – 140
Canadian Clinics
Guelph Family Health Team
– 137 Primary Care
Providers
Wise Elephant Family
Health Team – 25 Primary
Care Providers
McMaster Family Health
Team– 31,000 patients
The Peterborough Clinic –
127 Primary Care Providers
Women's College Hospital
Family Practice Health
Centre – 50 Primary Care
Providers
PwC
FOR DISCUSSION PURPOSES ONLY
10
B
Pressures in Canadian Retail Pharmacy
An excess of skilled pharmacists, combined with lower funding is creating the need to
transform the role of the pharmacist and by extension, the pharmacy itself
Excess pharmacist capacity due
to:
• Increased automation in
pharmacies
• Independents and chains like
Target closing down
• Rise in internationally
trained pharmacists entering
Canada due to new
immigration policies
PwC
FOR DISCUSSION PURPOSES ONLY
11
High-Number of Hospital-based Specialists Unable to Find
Work Shortly after Graduation, 2011 and 2012.
Source: Frechette et al. (2013)
100
90
80
70
Percent
60
50
40
30
20
10
-
PwC
FOR DISCUSSION PURPOSES ONLY
Slide 12
Specialists Growing Faster than Population as
Wait Times Persist, 1999 to 2013.
Specialist Physician and Population Growth
(1999=1.0)
1.5
1.4
1.3
1.2
1.1
1.0
0.9
0.8
1999
2000
2001
2002
2003
2004
2005
Number of Specialists (1999=1.0)
PwC
2006
2007
2008
2009
2010
2011
2012
2013
Population (1999=1.0)
FOR DISCUSSION PURPOSES ONLY
Slide 13
C
Move from Global Budgets to Patient-Based
Funding Models
New funding models are driving innovation and a greater awareness of variations in care
provision
Target Funding Model – Ontario Hospital Sector
April 2014
April 2012
HBAM
40%
Global
55%
HBAM
40%
Global
30%
QBP
30%
QBP
5%
PwC
Source: MOHLTC
FOR DISCUSSION PURPOSES ONLY
14
D
The Rapid Transition of Care: From the Office to
Virtual
By 2020, more than 25% of care will be delivered
virtually (with provider and patient in separate places).
- Dr. Ed Brown, 2012
many small pilots
PwC
25%
FOR DISCUSSION PURPOSES ONLY
15
D
The Proliferation of mHealth Tools and
Applications
While still in the early phase of the adoption curve, mHealth tools are becoming more and
more prevalent across almost all care settings
PwC
FOR DISCUSSION PURPOSES ONLY
16
Consumer empowerment
Canada’s consumers are demanding
modernization
Source: PwC Canada - Making Care Mobile
PwC
FOR DISCUSSION PURPOSES ONLY
Slide 17
This is already happening at Kaiser
PwC
FOR DISCUSSION PURPOSES ONLY
Slide 18
D
The Apps Pharmacy: Natural Extension to Drug
Fulfilment
Tech Rx
Apps Pharmacy not Apps Store
Take 2 Apps and
Call Me in the
Morning
Apps Formulary
PwC
AliveCor
Cardiac
Withings
Blood Pressure
bant
Diabetes
Pain Squad
Pain Mgmt
MyIBD
Crohn’s Disease
FOR DISCUSSION PURPOSES ONLY
19
D
Relieving the Need for Direct Face-to-Face
Interactions
These tools can be used to effectively upskill providers, enable virtual consultations, or even
empower effective self-care
Traditional
Traditional
Providers
Health Care Setting
Physician
Extender / Retail
Virtual
Consultations
The delivery of convenient,
in-person care in a
traditional retail clinic
setting
The use of
videoconferencing and
telepresence capabilities to
provide common consultations
Enhance
Enhance existing retail
clinic offerings and
experience
PwC
Expand
Expand telehealth
pilot capabilities
FOR DISCUSSION PURPOSES ONLY
Virtual
Do-it-yourself
healthcare
The use of connected health
devices and remote patient
monitoring devices to diagnose
common conditions and monitor
chronic diseases
Innovate
Deliver customers
innovative DIY health
offerings
20
E
A New Health Economy: Disruption by New
Entrants
Nearly half of the Fortune 50 companies are new entrants eager to leverage their
consumer assets
Critical assets include:
• Global reach
• Consumer insights
• Trusted brands
PwC
FOR DISCUSSION PURPOSES ONLY
21
E
The Potential Future: Healthcare as a Truly Retail
Business
In the US, “Care anywhere” offerings are
gaining traction among customers and
clinicians alike …
Consumers likely
to choose DIY over
traditional option
58%
Use an at-home
strep test at a store
55%
Check vital signs at
home with device
on phone
54%
Send digital photo
of skin problem to
dermatologist
47%
44%
42%
PwC
Clinicians
comfortable using
DIY option to
prescribe meds
Check for ear
infection using
device on phone
Have ECG at home
using device
attached to phone
Do urinalysis test at
home with device
on phone
… while both new entrants and existing
providers are capitalizing on the growth
in video consultations and DIY health
Pharmacy
Competitor
43%
53%
48%
26%
Working with startup
MDLive to offer video
visits with board-certified
doctors through the retail
pharmacy chain's mobile app
Smart Care Doc™ opened
America’s first telemedicine
clinic at Walmart with
Bluetooth-enabled
diagnostic devices
Traditional
Provider
32%
47%
FOR DISCUSSION PURPOSES ONLY
Retail
Competitor
HealthPartners launched
Virtuwell, a 24/7 online
clinic that reinvents the
diagnosis and treatment
experience for everyday
illnesses
22
Thank you
Will Falk
Managing Partner, Health Industries
416.317.9232
[email protected]
Twitter: @willfalk
This content is for general information purposes only, and should not be used as a substitute
for consultation with professional advisors.
© 2015 PricewaterhouseCoopers LLP, an Ontario limited liability partnership. All rights
reserved.
PwC refers to the Canadian member firm, and may sometimes refer to the PwC network. Each
member firm is a separate legal entity. Please see www.pwc.com/structure for further details.
FOR DISCUSSION PURPOSES ONLY
23
Hospital Standardized Mortality has declined 18%
(Ontario FY09-13)
Ontario
Average
HSMR
FY 2009
FY 2010
FY 2011
FY 2011
FY 2013
104
98
92
89
85
115
110
2009-10
105
2013-14
100
95
90
85
80
75
70
65
Source: HSMR Region Results Ontario, 2014, CIHI
PwC
FOR DISCUSSION PURPOSES ONLY
Slide 24
Even Fraser puts Ontario First in Access!
Median Wait Time by Province, 2014
Weeks waited from Referral by GP to Treatment
PwC
FOR DISCUSSION PURPOSES ONLY
Slide 25